Capital Gains

jageier — Mon, 09 Mar 2026 11:21:12 GMT

On 6/30/2010 we purchased a second/vacation home in Mesa, Arizona. It was a large mobile and the land it was on was included in the purchase for $128,000. Our primary home was in Alaska.

Beginning 1/1/2016 thru 4/30/2018 we had full time renters on the Arizona property. After 5/1/2018, we had the mobile home removed from the property and had a contractor begin new construction of a home ($260,000) that would later become our primary residence. On 5/1/2018, we sold our primary home in Alaska. We had our taxes professionally completed for 2018 and we are still carrying forward a loss of $46,185 to this date from the sale of the mobile.

On 1/1/2019, we moved into our new Arizona home and that was our primary residence up until 6/1/2021. On that date, we sold our home for $550,000. We were carrying a mortgage at the time of closing and after expenses and the payoff, we received $318,554.65 cash.

Now for completing our taxes for 2021, (joint return with spouse) Turbo tax requests all the info about the property from when we first purchased it; rented it and eventually sold it and then wants us to pay capital gains. Being we reported the rental of the mobile in the past; sold the mobile (for a loss) and then had a newly constructed home built on the same land, are we allowed to start the clock over (so to speak) when the new home became our primary residence and therefore lived in it for 2 years 5 months and avoid capital gains?

Seriously Confused at this point.

Re: Capital Gains

ErnieS0 — Sun, 10 Apr 2022 01:24:17 GMT

Yes. You can start the clock over. You qualify for the home sale exclusion because you owned and lived in your Mesa, Arizona home for two years within a five-year period.

I’m assuming the home was never rented so your cost would be the original land cost + construction cost + any improvements.

Special situations would not apply to you because this particular home was never rented or used for business and land does no depreciation.

Home sale exclusion

Re: Capital Gains

jageier — Sun, 10 Apr 2022 21:46:15 GMT

You are correct, the new home was never rented. Thanks for your quick response!!

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Capital Gains

Re: Capital Gains

Re: Capital Gains